Finding Text
Finding 2025‐005 – Cash Management Information on the federal program: Federal awarding agency: United States Department of Education (ED) Federal program: Student Financial Assistance Cluster: Federal Direct Student Loans, Assistance Listing No. 84.268 Award years: 2024‐2025 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR 200.303 requires that a non-federal entity must (a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Cash Management Program Requirements for Direct Loans – Monthly Reconciliations Schools participating in the Direct Loan program are required to perform monthly Direct Loan reconciliations (34 CFR 685.300(b)(5)). Electronic Announcements DL-22-07 and GENERAL-22-86 explain that a school must reconcile the funds it received from G5 with actual disbursement records the school submitted to COD. Each month, COD sends the school a School Account Statement, which is ED’s official record of the school’s cash and disbursement records and identifies the difference between the net draws from G5 and the actual disbursement information reported to COD by the school. The school is required to account for any differences by reconciling ED’s records (School Account Statements) with the school’s financial and business records. Condition: The University did not provide evidence that the School Account Statements (SAS) from ED were used to reconcile to the University’s financial and business records on a monthly basis during the year ended May 31, 2025. Cause: The University did not have effective internal controls and procedures in place to ensure the use of SAS in monthly reconciliations. The University indicated that they used SAS in their monthly reconciliations; however, they did not retain evidence that the SAS was used, including accounting for differences between SAS and the University’s financial and business records. Effect or potential effect: Lack of external monthly reconciliations between the University’s records and SAS could result in incorrect data in the University’s records and ED systems and cash management and disbursement reporting timelines not being met. Questioned costs: $0 Context: While the University provided evidence of internal daily reconciliations, the University did not provide evidence that they utilized SAS for monthly reconciliations, as required. Total Student Financial Assistance Cluster expenditures for the year ended May 31, 2025, were $138,008,610, of which $118,404,580 were for Direct Loans. Identification as a repeat finding, if applicable: Yes – 2023-003 Recommendation: The University should review and revise its internal controls and procedures surrounding the monthly reconciliations to SAS and retain evidence of such reconciliations, including SAS. Views of responsible officials: Management agrees with the finding and has developed a corrective action plan in which the Office of Financial Assistance will maintain evidence of monthly reconciliations between SAS and the University’s financial and business records. The corrective action was implemented by February 1, 2026.